As rents continue to remain high, it’s been hard for New Yorkers to meet the steep income requirements for rentals.
Landlords want renters who earn an annual salary of 40 times the monthly rent and have good credit. That means if you want to rent an apartment for $4,000 per month, you would need to earn north of $160,000 to successfully secure the apartment. If you have roommates, that income total would be split, but many New Yorkers these days are opting to live solo, if their budget allows.
Renters with borderline credit or income can no longer offer to put down additional funds as part of a security deposit. In 2019, the rent laws changed and capped security deposits to one month’s rent – maximum.
Despite losing that bargaining chip, renters do still have options at their disposal to secure a rental. Here are a few ways to get around the 40X rent rule:
A Personal or Institutional Guarantor
A personal guarantor is someone who will co-sign your lease and pay the rent if you don’t. They are generally required to have a credit score of at least 700, and an annual income of 80 times the monthly rent. Many New York City landlords prefer the personal guarantor to live in the Tri-State Area.
A guarantor can be a friend or relative or you can use an institutional guarantor like Insurent or TheGuarantors, which are third-party services that can, guarantee your entire lease, for a fee, if you qualify.
Improve Your Credit Score
Many landlords are looking for a credit score around the 700 range.
If the reason for your lower credit score is that you don’t have a credit history, opening some credit cards and beginning making regular, on-time payments could help you.
If there are errors on your credit report, make sure they are corrected and get letters of explanation for any major issues like a lien or bankruptcy.
Leverage Market Seasonality
Traditionally, the winter is slower for rentals, so if you search for an apartment from October through March, you may find a landlord who is more open to renting to you if you are just below income requirements.
Get A Roommate
While some New Yorkers may not prefer this option, getting a roommate is a great way to reduce monthly expenses and get closer to the 40X rule. In situations where a roommate(s) has better financials than the others, oftentimes they will be the leaseholder(s) and do a roommate agreement with the other tenants.
For help finding a rental or exploring your options, reach out to Platinum Properties today to speak with a rental expert.